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China’s exit from a coronavirus suppression strategy relying on lockdowns will eventually boost oil consumption by more than 1 million barrels per day (bpd) as domestic and international travel rebounds.
But first the country will have to endure a massive exit wave of infection disrupting economic activity and travel, depressing oil consumption in the short term.
Exit from lockdowns is likely to have a J-curve effect, lower oil consumption and prices in the first quarter of 2023 but increasing both later in the year.
Since the first quarter of 2020, strict lockdowns and quarantines have had a massive negative impact on passenger travel inside China as well as with destinations outside the country.
The number of passengers carried on all modes of transport in the first 10 months of 2022 was down by 67 percent compared with the same period in 2019.
There were massive reductions in passengers carried by road (-82 percent), air (-63 percent) and rail (-52 percent) compared with before the pandemic.
There were similar reductions in transport demand when measured by total distance travelled (passenger-kilometers).
As restrictions on movement are eased, however, travel demand will eventually rebound as much of this business and leisure travel resumes.
China’s refineries processed roughly 13.4 million barrels per day (b/d) of crude in the first 10 months of 2022, according to data from the National Bureau of Statistics (NBS).
